Empirical Study on the Impact of Environmental Uncertainty on Dynamic Adjustment of Financial Flexibility
Keywords:Environmental uncertainty, Financial flexibility, Dynamic adjustment.
From the perspective of environmental uncertainty, this paper further studies whether the dynamic adjustment of the financial flexibility of enterprises will be affected by environmental uncertainty and its changes. Through the research, it is found that there is a reasonable level of target flexibility, and the actual financial flexibility of enterprises will constantly converge to the target. Environmental uncertainty will accelerate the dynamic adjustment of financial flexibility. The change in environmental uncertainty will also accelerate the dynamic adjustment speed of financial flexibility. It can help enterprises correctly understand financial flexibility, and then guide enterprises to make reasonable and effective financial decisions so that the financial decisions of enterprises are more scientific.
Cook, D. O., Tang, T., Macroeconomic Conditions and Capital Structure Adjustment Speed, Journal of Corporate Finance, Vol. 16 (2010) No.1, p.73-87.
Tung R L. Dimension of Organizational Environments: An Exploratory Study of the impact in Organization Structure. The Academy of Management Journal, Vol. 22 (1979) No.4, p.672-693
Milliken F J. Three Types of Perceived Uncertainty about the Environment: State, Effect, and Response Uncertainty. Academy of Management Review, Vol. 12 (1987) No.1, p.133-143.
Byoun S., How and When do Firms Adjust their Capital Structures toward Targets", The Journal of Finance, Vol. 63 (2008) No.6, p.3069-3096.
DeAngelo H., DeAngelo L., Capital Structure, Payout Policy, and Financial Flexibility" , Working Paper of Marshall Business School, Vol. 1 (2007) No.1, p.1-25.
Y. Ma, G.L. Shi, Y.T. Liu. Research on the Impact of Environmental Uncertainty on Enterprise Innovation. Theory & Practice of Finance and Economics, Vol. 43 (2022) No.1, p.2-8.
M. Xing, D. Chen, H.M. Zhang. The Impact of Environmental Uncertainty on Enterprises' 'Transition from Real to Virtual: Empirical Evidence from Chinese Listed Companies. Industrial Technical Economics, Vol. 41 (2022) No.10, p.124-131.
A.M. Zeng, Y.L. Fu, Z.H. Wei. Financial Crisis Impact, Financial Flexibility Reserve, and Corporate Financing Behavior: Empirical Evidence from Chinese Listed Companies. Journal of Financial Research, Vol. 376 (2011) No.10, p.155-169.
K.L. Deng, M.X. Liu. Environmental Uncertainty, Financial Flexibility, and Cash Dividends of Listed Companies. Journal of Finance and Economics, Vol. 299 (2013) No.2, p.46-55.
M.X. Liu, X.H. Xiang. Environmental Uncertainty, Enterprise Characteristics, and Financial Flexibility. Macroeconomic Research, Vol.185 (2014) No.4, p.127-134.
H.X. Tong. Research on the Relationship between Financial Flexibility, Inefficient Investment, and Enterprise Value of Listed Companies. Forecast, Vol. 40 (2021) No.1, p.31-37.
A.Q. Wang, W.P. Tang. Research on the Impact of Environmental Uncertainty on the Relationship between Financial Flexibility and Enterprise Growth. China Soft Science, Vol. 315 (2017) No.3, p.186-192.
R.H. Yang, Z. Huang. Environmental Uncertainty, Financial Flexibility, and Enterprise Value: Empirical Evidence Based on A-share Listed Companies from 2008 to 2014. Journal of Finance and Accounting, Vol. 728 (2016) No.36, p.27-31.
C. Liu, X.Y. Yang, L.D. Li. Does environmental uncertainty affect the stickiness of company expenses. Financial Development Research, Vol. 449 (2019) No.5, p.13-21.
F. Chen, X.Y. Han. Environmental Uncertainty, Financial Flexibility, and R&D Investment: Empirical Evidence Based on Listed Companies on the Small and Medium Sized Board. Industrial Technology Economics, Vol. 37 (2018) No.10, p.19-25.
Y.M. Fu, L.P. Zhang, W.C. Li. Macroeconomic Uncertainty, Diversification and Financial Flexibility. Journal of Finance and Economics, (2019) No.1, p.61-70.
W.H. Wang, Q.Y. Ye, X. Shen. Can differentiation strategy promote dual innovation investment—— The moderating effect of environmental uncertainty and financial flexibility. Forecasting, Vol. 40 (2021) No.2, p.47-54.
X.G. Wang, Y.H. Sheng. Financial Flexibility and Strategic Change - Environmental Uncertainty and the Regulating Role of Chain Shareholders. Management Modernization, Vol. 41 (2021) No.2, p.59-63.
Y.M. Sun, G.T. Zhang. Testing the Relationship between Overconfidence of Managers, Financial Flexibility of Enterprises, and Overinvestment. Statistics and Decision, Vol. 36 (2020) No.6, p.178-181.
N. Xu. Research on Environmental Uncertainty, Overconfidence of Managers, and Dynamic Adjustment of Financial Flexibility. Dongbei University of Finance and Economics, China, 2016.
How to Cite
This work is licensed under a Creative Commons Attribution 4.0 International License.